Banks anticipate profits and more loan issues in 2015

The managements of Greek banks have set ambitious targets for the new year and aim to boost their profits as well as to increase the financing made available to corporations and households.

Senior banking officials are optimistic that general elections on January 25 will not derail the economy from its positive course and believe that none of the leading political parties have any real desire to challenge Greece’s European prospects.

In the last quarter, under the shadow of a rapid deterioration in political and economic conditions, managers at the country’s main banks completed their plans for 2015, which are based on the assumption that conditions will improve in the economy this year.

The swift implementation of restructuring programs (through the reduction of the number of branches and staff), the strengthening of the stock of provisions (to 60 percent of bad loans), the confirmation of the banks’ strong capital base as reflected in the recent stress tests, and above all the prospect of economic recovery after six years of deep recession, have formed the foundation for a return of the credit sector to profits this year.

In this context banks are looking forward to supplying credit of more than 10 billion euros in 2015 to enterprises and households, which will in turn accelerate the recovery of the economy. Bank officials have told Kathimerini that the issue of new loans, combined with the benefits banks are reaping from a radical restructuring in the last two years, allow for some optimism that under normal conditions 2015 will be the first year of profits after the outbreak of the fiscal crisis.

Senior officials say that the key points that will determine whether the credit sector becomes profitable again will be the benefits of the restructuring process and more efficient management of nonperforming loans.

From over 20 banks in the sector just five years ago, only four systemic lenders, Attica Bank and a few cooperative banks remain alive today. Some 1,200 branches have shut down and the payroll has shrunk by about 14,000 people. Banks also expect that the new, specialized units created for handling bad loans will lead to great retrieval rates, partly through locating and cracking down on so-called strategic defaulters.